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Adjusting entries Hahn Flooring Company uses a perpetual inventory system. Journalize the December 31 adjusting entries based upon the following: a. The inventory account has a balance of $1,333,150, while physical inventory indicates that $1,309,900 of merchandise is on hand. Assume any shrinkage is a normal amount. If an amount box does not require an entry, leave it b

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Explanation:

Adjusting entries Hahn Flooring Company uses a perpetual inventory system. Journalize the December 31 adjusting entries based upon the following: a. The inventory account has a balance of $1,333,150, while physical inventory indicates that $1,309,900 of merchandise is on hand.

Perpetual inventory debits the inventory account directly instead of any reserves for inventory write down.

Hence the appropriate entry will be:

JOURNAL ENTRIES

Dr. Cost of Sales....($1,333,150 - $1,309,900)...$23,250

Cr, Inventory........................................................................$23,250

Being inventory write down to cost of sales for the period

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